Bullish on
Gerdau Ameristeel
Following our previous report on Feb. 21, 2005 ($8.12), Gerdau Ameristeel Corp., (yesterday's close $8.40), had a series of rallies and pullbacks that culminated with a high of $20 in June 2008 (A) for a 146-per-cent appreciation at that time. Subsequently, the stock reversed the up-trend and sold off to $3.70 the same year (B). The price action that followed appears to be that of a bullish "W" formation (see dotted lines). The recent rise above $9 signalled the breakout above the neckline (see dashed line) and confirmed the start of a new major up-leg. Only a decline below the 40-week moving average (40wMA) (currently at ±$7) would cancel the positive upside potential.
Point & Figure measurements provide a target of $11. The large "W" pattern supports higher targets.
Ron Meisels is a contributor to the http://www.NA-marketletter.com website. Monica Rizk is the senior technical analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.
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